Is Fantom (FTM) heading for another price dip? After a shaky February and an 18% price decline, Fantom, the blockchain platform aiming to rival Ethereum in the Decentralized Finance (DeFi) space, is facing headwinds as we enter March. For those invested in DeFi services and the broader cryptocurrency market, understanding the factors influencing FTM’s price is crucial. Let’s dive into the on-chain data to see what’s potentially in store for Fantom.
Why is Fantom (FTM) Facing Downward Pressure?
Several on-chain metrics suggest that Fantom (FTM) might experience further price declines in the coming weeks. Let’s break down the key indicators:
1. The Rising Network Value to Transaction (NVT) Ratio: A Warning Sign?
According to Santiment, a leading cryptocurrency data analytics firm, the Network Value to Transaction (NVT) Ratio for FTM is flashing a warning signal. But what exactly is the NVT ratio, and why should it concern FTM holders?
In simple terms, the NVT ratio is like the Price-to-Earnings (P/E) ratio in traditional stock markets. It compares a cryptocurrency’s market capitalization (Network Value) to the volume of transactions on its blockchain. A high NVT ratio can indicate that the asset’s price is high relative to the activity on its network, suggesting it might be overvalued.
NVT Ratio = Market Capitalization / Transaction Volume
As the graph mentioned earlier indicates, the FTM NVT ratio has been steadily increasing since mid-February while the price has not followed suit. This divergence suggests that FTM’s market cap is growing faster than its transaction volume, potentially signaling an overbought condition. Historically, such situations often precede a price correction or sell-off.

Key Takeaway: A rising NVT ratio for FTM suggests that the token’s valuation might be outpacing its network utility, increasing the risk of a price drop.
2. Exchange Inflows: Are FTM Holders Preparing to Sell?
Another concerning trend is the increasing inflow of FTM tokens into cryptocurrency exchanges. Data from IntoTheBlock, a blockchain analytics platform, reveals a significant rise in FTM netflow to exchanges. Why is this important?
When a large number of tokens are moved to exchanges, it often indicates an intention to sell. An increase in netflow means more tokens are entering exchanges than leaving, increasing the available supply for trading and potentially putting downward pressure on the price.
Since March 3rd, over 8.7 million FTM coins have flowed into major exchanges. This substantial inflow suggests that a significant portion of FTM holders might be anticipating a price decrease and are positioning themselves to sell their holdings.
Key Takeaway: Rising exchange inflows of FTM tokens point towards potential selling pressure and a possible price decline.
3. Decoding Exchange Market Depth: Predicting Potential Support Levels
To get a clearer picture of potential price movements, let’s examine the Exchange Market Depth chart provided by IntoTheBlock. What does this chart tell us about FTM’s future price trajectory?
Exchange Market Depth visualizes the aggregated limit orders (both buy and sell orders) at different price levels on exchanges. It helps identify areas of potential support (price levels where there’s significant buying interest) and resistance (price levels where there’s significant selling pressure).
The bid-ask spread, a key component of market depth, represents the difference between the highest bid price (buy order) and the lowest ask price (sell order). A deep market, characterized by tight bid-ask spreads and substantial order volumes at various price levels, indicates high liquidity and potentially stronger support and resistance zones.
According to the Market Depth analysis, the current negative trend for FTM could potentially find support around the $0.35 level. At this price point, there’s a significant buy wall with approximately 14.4 million FTM tokens in demand. This suggests that $0.35 could act as a strong support level, potentially halting further price declines.
However, if FTM fails to hold above this $0.35 support, the analysis indicates the next major buy wall is around $0.30, with even larger demand of 19 million FTM tokens. This level could represent the next significant support zone if the $0.35 level is breached.

Key Takeaway: Exchange Market Depth analysis suggests potential support levels for FTM at $0.35 and $0.30. Monitoring these levels is crucial for understanding future price movements.
Fantom (FTM): A Quick Recap
Before we conclude, let’s quickly recap what makes Fantom (FTM) stand out in the crowded cryptocurrency landscape:
- Directed Acyclic Graph (DAG) Technology: Unlike traditional blockchains, Fantom utilizes a DAG structure, which aims to offer faster transaction speeds and improved scalability.
- Smart Contract Platform: Fantom is designed as a platform for deploying and running smart contracts, similar to Ethereum, enabling the development of decentralized applications (dApps) and DeFi services.
- Focus on DeFi: Fantom is heavily focused on supporting the growth of the DeFi ecosystem, offering a platform for building various DeFi applications.
- Ethereum Compatibility: Fantom is designed to be compatible with Ethereum, making it easier for developers to port their Ethereum-based projects to the Fantom network.
Navigating the Potential Downtrend: What Should FTM Holders Do?
The on-chain data paints a cautious picture for Fantom (FTM) in the short term. While the analysis suggests potential support levels, the overall trend appears to be negative. So, what actions can FTM holders consider?
Important Disclaimer: This is not financial advice. Cryptocurrency investments are highly risky. Conduct thorough research and consult with a financial advisor before making any investment decisions.
>
- Stay Informed: Continuously monitor on-chain metrics like NVT ratio, exchange flows, and market depth for FTM. Tools like Santiment and IntoTheBlock can be valuable resources.
- Watch Support Levels: Keep a close eye on the $0.35 and $0.30 support levels identified by market depth analysis. A break below these levels could signal further downside.
- Risk Management: Consider implementing risk management strategies such as setting stop-loss orders to limit potential losses if the price declines further.
- Diversification: Ensure your cryptocurrency portfolio is well-diversified and not overly reliant on a single asset like FTM.
- Long-Term Perspective: If you believe in the long-term potential of Fantom and its technology, consider viewing short-term price fluctuations as opportunities to accumulate more FTM at lower prices (Dollar-Cost Averaging).
Conclusion: Navigating FTM’s Market Volatility
Fantom (FTM), while a promising smart contract platform in the DeFi space, is currently facing market headwinds. Rising NVT ratio and increasing exchange inflows suggest potential selling pressure, and market depth analysis points to critical support levels that will determine its short-term price trajectory. For cryptocurrency investors holding FTM, staying informed, monitoring key metrics, and practicing prudent risk management are crucial in navigating this period of market volatility. The blockchain and decentralized finance space is ever-evolving, and understanding these market dynamics is key to making informed decisions in the world of cryptocurrency.
Disclaimer: The information provided is not trading advice, Bitcoinworld.co.in holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.